MARKET BASED RELIEF
A Manual for the Use of Vouchers in Relief and Recovery Programs
INTRODUCTION
Vouchers have been used in emergency and relief operations for well over 20 years. Since 2000, their use has become more widespread, following work by agencies such as CARE and CRS to develop voucher and seed fair schemes as an alternative to ‘seeds and tools’ direct distribution programs in Africa.
Along with cash programs, voucher schemes are now often seen as preferable to direct distributions in cases where goods are available on local markets. Reasons include that they are more cost effective, safer, less open to corruption or leakage, and do not undermine markets. As a result, vouchers are increasingly often used to provide food, agricultural and livelihoods inputs and services, and relief and construction materials.
In Indonesia, CARE has developed considerable experience in implementing voucher programs. For over five years, it has used vouchers and seed fairs to provide seed aid in disaster affected provinces. More recently, it successfully piloted a Market Based Food Assistance (MBFA) voucher scheme as part of its tsunami response in Aceh. Following the Yogyakarta earthquake in 2006, the same approach was used to provide food and non-food items. CARE’s reconstruction program in this area has also used vouchers to supply construction materials as part of an aided self-help house construction scheme.
This manual outlines a standard methodology for CARE voucher schemes in Indonesia, drawing on examples and lessons from these previous programs. At its core is a set of standard operating procedures for using vouchers, whether for seed aid, food, or provision of relief or construction materials. More general guidance is also offered on program design and planning, particularly assessments, orientation and liaison with communities and vendors. In addition, it includes suggested performance indicators and sample formats for use by project staff.
The manual does not offer guidance on the much-debated issues of when voucher programs are appropriate, and whether or why they should be used instead of cash. It does discuss basic considerations for assessment of suitability and feasibility. But it is not the aim of this manual to establish that vouchers are preferable to cash programs or direct distributions. This is a decision to be taken by project designers, based on their assessment of the context and capacity to administer an intervention.
A. DESIGN: ASSESSMENT AND OBJECTIVE SETTING
Checklist
§ Is the program based on proper assessment and problem identification?
§ Do program objectives properly reflect the reasons for using vouchers?
§ Are indicators sufficient to judge impact?
§ Do assessments provide necessary baseline information?
§ Are specific assessments used to identify range and type of goods supplied?
§ Does the project have agreed performance indicators for using vouchers?
As with any intervention, design of voucher schemes must be based on assessment and analysis of the local situation, to ensure that problems and objectives are clearly defined.
1. Food / seed security assessments
Often the justification for using vouchers instead of direct distribution of food or seeds is that beneficiaries are suffering from seed or food insecurity because they cannot access goods, even though these goods are locally available. Where programs are intended to address these so-called ‘entitlement’ issues, assessments should properly diagnose the root causes of insecurity and demonstrate the suitability of voucher responses.
Experiences in other countries suggest that this is a particular issue for seed fairs. While food security assessments are commonly carried out before food aid is provided, programs that promote seed security are less often based on proper analysis of seed systems and markets. This can lead to problems, as projects that act without proper understanding of the issues risk making mistakes such as undermining farmer seed systems, bypassing local outlets, or introducing inappropriate varieties.
2. Objectives, impact indicators and baseline information
It is also often said that voucher programs strengthen markets, or reduce seed or food insecurity. But too often, evidence is not gathered to substantiate such claims. Where such aims are central to an intervention, program designers should ensure that they are reflected in project objectives and indicators, and that assessments gather enough baseline information to support impact assessment.
3. Specific assessments and performance indicators
Of course, sometimes vouchers only play a supporting role. For example, they might be used to provide commodities simply because they are thought to be cheaper, easier, or fit better within a wider program than cash or direct distribution. Where this is the case, wider assessments, for example of impact on markets, might not be needed unless there are concerns about potential negative impacts.
But it is important to note that projects should still make specific assessments and set performance targets, even if these are not explicitly reflected in a logframe. At the very least, assessments must be used to help determine range and type of goods to be supplied. Performance measurement should also reflect key targets. Taking the example of seed fairs again, PRA or other field assessments must be used to determine the range of seeds supplied. Performance targets should include percentage of vouchers exchanged, range of products available and average number of vendors attending fairs.
B. PLANNING AND PREPARATION
Checklist
§ Feasibility has been demonstrated by assessment or in previous programs
§ Activity planning covers orientation of stakeholders and materials needed to do it
§ Post-monitoring surveys and meeting reports refer to key standards
§ Targeting criteria and beneficiary selection process are established with stakeholder input
1. Feasibility Assessment
Before implementation, a feasibility assessment should be conducted to identify sites and ensure that interventions are appropriate. The assessment uses rapid household and market surveys to look at major pre-conditions for implementing a voucher scheme.
Issues covered include:
o Support and cooperation of local leaders/ beneficiary representatives
o Support and cooperation of beneficiaries
o Suitable vendors willing to participate
o Physical market access for beneficiaries
o A stable supply of the commodity in the market
o A safe and secure environment for staff and beneficiaries
o Good transport infrastructure
o An established supply chain between wholesalers and shops
o Reasonable and stable prices for the commodity
A sample feasibility assessment matrix and questionnaire formats are included in the appendices. Such assessment will be particularly useful in areas where voucher interventions are implemented for the first time. In areas where voucher interventions have previously been used for a commodity, such assessment might not be needed.
2. Orientation
Orientation should be conducted with government representatives, vendors, village officials and community members from the outset of a project. Planning must therefore cover the strategy and resources needed for orientation of various stakeholders.
When planning orientation, it is important to note that this does not just mean one-off meetings and events. To increase effectiveness, teams should try to ensure that orientation is carried out in informal settings as well as through more formal events.
To inform such planning, staff should identify what must be communicated, when, and how this will be done. The following issues will be relevant to all stakeholder groups:
o Who is CARE Indonesia and what does it do, particularly in this area?
o What is the aim of this project?
o Who are the beneficiaries of this project, how are they selected?
o How does the voucher system work? Who is responsible for what?
o What are the advantages for vendors and for beneficiaries?
Below is some more detailed discussion of key stakeholder groups. But guidance here is not intended to be prescriptive – in the end, it is up to staff to determine how much time and effort can be devoted to orientation based on local context, and the type and urgency of projects. In addition, local government orientation is not discussed further. However, it is assumed that staff will plan for appropriate levels of involvement.
a. Vendor orientation
Proper orientation about program aims, activities and mechanisms, as well as about CARE more generally, is crucial to building successful relationships with vendors.
First and foremost, vendors need to understand how participation will benefit their businesses. To achieve this, staff must take time to explain program aims and mechanisms. Key issues will be to demonstrate how the program has potential to bring vendors more business, and to persuade them that additional administrative burdens will be offset by a small fee.
An additional complicating factor in the early stages is that vendors are often concerned about taking risks. In particular, they might be unsure that CARE will pay. On the positive side, however, experience also shows that vendors are often motivated by a desire to help members of their communities. Explanation of who CARE is and what it is trying to do are crucial both to building trust and promoting willingness to participate.
Story on vendor unwillingness… how to persuade them
Convincing vendors to participate in voucher schemes can be hard work in project areas where vouchers are being used for the first time…
Vendor orientation should be integrated into other preparatory activities. In particular, feasibility assessments, vendor identification and screening, and price determination meetings offer opportunities to give explanations to vendors and listen to their concerns. During planning, staff should determine what orientation is needed, when and how it will be done, and the resources (e.g. fact sheets or checklists for staff) needed to do it.
b. Village leaders, representatives and community members
Voucher interventions typically require more intensive community orientation than direct distributions or provision of cash. There are a number of reasons for this. For one, beneficiaries will certainly be less accustomed to vouchers that they are to using cash or receiving goods. The mechanisms are also usually more complex, and the level of participation specified probably more intensive than with other aid delivery methods.
Village leaders/ coordinators and beneficiary representatives have a crucial role to play in planning and administering voucher schemes. They will therefore be involved from the beginning in discussions with the project team on the feasibility of carrying out project interventions in their community.
As planning develops, more formal group orientation of village leaders and beneficiary representatives will be required to explain the project and receive feedback. In addition to more general explanation as detailed above, specific issues covered should include:
o Criteria and procedures for beneficiary selection
o Types of goods to be supplied to beneficiaries
o Processes for determining prices and quality with vendors
o How wider community orientation should be conducted
o Where and when voucher distributions would be held
o How complaints and feed back from communities should be handled
o Roles of village leaders and beneficiary representatives in these processes
Working with community representatives
Close involvement of community representatives in planning, implementation and monitoring is crucial to the success of market based schemes. But working out who to involve and how to involve them requires some thought about who is best qualified to represent the interests of different sections of a community.
Although often considered separately to ‘community representatives’, in Indonesia village officials or coordinators do represent their communities, whether or not they actually do a good job of it in reality. Where possible, projects should work with these figures to help them to fulfill their proper role, including in community orientation, beneficiary selection, arranging distributions and managing complaints.
At the same time, it will also be necessary to ensure that all sections of the community are properly represented, and that effective checks are in place to prevent abuse of power. As a result, it also important to consider how to promote involvement of other beneficiary representatives.
Setting up a ‘community committee’, including village officials, informal leaders, and representatives of stakeholders such as farmers and women is one way to do this. Composition is determined after community consultations and simple stakeholder analysis. Such a committee can play a key role in planning and executing projects, helping to promote empowerment, ensure openness and provide feedback on the project.
This approach is strongly recommended, especially in non-emergency contexts. But exactly how a project engages community representatives will depend on the local context, type of intervention and time available. In any case, the key issues are always the same: ensuring that information is widely available, processes are transparent and participation is widespread. External checks should also be exercised by staff, including by conducting activities jointly and through monitoring such as spot checks and surveys.
Community orientation should be participatory and led by community representatives and project staff. Discussion of the project should cover the basic orientation issues, including introducing CARE, planned project aims, beneficiaries and mechanisms.
More detailed discussion should cover issues that directly affect communities, including;
o Criteria and procedures for beneficiary selection
o Types of goods to be supplied
o Where, when and what time of day voucher distributions will be held
o Where, when and how vouchers can be exchanged
o Roles of CARE, village leaders, vendors and beneficiary representatives
o How more information will be provided, who to ask, how to complain
People should be encouraged to ask questions and provide inputs, particularly on concerns about beneficiary selection criteria, type of goods to be supplied, and sites and timings for distribution and voucher exchange. In relation to sites and timings, project staff must ensure to consult properly with beneficiaries on security and accessibility of locations for voucher distribution or seed fairs.
3. Targeting and beneficiary selection
Profiling and targeting beneficiaries begins at the project design stage. Then, selection of areas and beneficiary groups should be based on assessments and discussion with government and other stakeholders.
During project set up, targeting and selection is extended to cover specific communities and households/ individuals. This is usually done in villages by field staff together with communities and community leaders. The following describes the processes involved in establishing detailed targeting criteria and processes for beneficiary selection.